Why should someone use an attorney for closing a real estate transaction? In Michigan, a real estate attorney ensures that every piece of the deal is in place and in order. The role of the attorney depends on the complexity of the deal. In smaller transactions, an attorney may take a less involved role and may only review documents. In larger, more complex deals the attorney will negotiate substantively with the other side and will manage a multi-faceted closing.
Every real estate closing is different. In Michigan, an attorney assisting in
Ideally, an attorney should assist in the negotiation of the terms of a purchase agreement prior to the execution of the contract. Once the closing process has begun, the closing attorney must make sure that all documents are consistent with purchase agreement’s terms and conditions. An attorney will look out for mistakes in the closing statements, typos, or incorrect legal descriptions.
An attorney must ensure that the deed conveyed is the most appropriate for the transaction. At closing, the attorney must also verify that the deed is the one called for in the purchase agreement.
Typically, a buyer will want a Warranty Deed as this provides the strongest marketable title available. In Michigan, nearly every residential purchase agreement will call for “the usual warranty deed conveying marketable title.” This means that the seller warrants to the buyer that the buyer’s interest is fully vested in the seller and the title is clear. MCL 565.151.
Unlike a warranty deed, a quitclaim deed gives no warranty of title. The seller only conveys whatever interests, if any, that they have to the buyer without any warranties. Quitclaim deeds are most often seen with gifts, investor transactions, or circumstances not present in a standard, arm’s length residential home purchase.
The closing statement shows how the funds will flow in the deal. There is typically a buyers statement and a seller’s statement. Often, an attorney will find mistakes in how tax or utility prorations have been calculated. Another common issue is ensuring that last minute concessions are accurately reflected in the closing statement.
Commitment For Title Insurance
Every buyer in Michigan should obtain a commitment for an owner’s policy of title insurance. An attorney should always review the
A real estate attorney should assist their client in deciding whether a survey is needed. In the residential real estate context, buyers are less likely to utilize a survey. However, in the commercial context, surveys are very common. Any buyer who may have concerns about where the property line falls or encroachments on the property should consider a survey
Prior to closing, an attorney will review the survey drawings to spot for issues. This could include determining whether proper setbacks are shown or looking for evidence of unauthorized use on the property to avoid adverse possession issues. Further, there should never be a difference between the survey’s legal description, the title commitment, or the vesting deed. Any discrepancies need to be resolved immediately.
Attend the Closing
A real estate attorney will sometimes attend a closing to protect his or her client’s interests. Issues do arise during closing and an attorney can act as a negotiator and advocate to resolve any problems.
Post Closing Matters
They are matters that the parties must attend to after the closing. Title companies usually handle most of these, but an attorney should verify they have been done. Some of these include filing the